A category-mistake in the classical labour theory of value
Keywords:classical political economy, labour theory of value, Ricardo, Marx, problem of an invariable measure, transformation problem
The classical labour theory of value generates two well-known contradictions: Ricardo's problem of an invariable measure of value and Marx's transformation problem. I show that both contradictions derive from a category-mistake of supposing that technical costs and total costs are of the same logical type. This category-mistake is the underlying cause of the almost two hundred year history of the 'value controversy'. Once identified we can avoid the mistake, which reveals a more general labour theory of value with an invariable measure of value and without a trans- formation problem.